Canada: American Express Canada launches pay-with-points option

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By: RickFerguson |

Posted on September 21, 2016

Transacting in Canada just got a little more fungible: American Express Canada last week announced the launch of UsePoints for Purchases, a new capability that allows eligible cardmembers to use Membership Rewards points toward a wide range of eligible everyday purchases charged to their card. It's a compelling new feature for members - but will it result in the commoditization of Membership Rewards points?

Eligible cardmembers enrolled in the Membership Rewards programme can access and redeem against eligible spending on purchases such as retail, dining and entertainment straight from the Amex App with just a few taps. To use points for purchases, eligible cardmembers login to their account via the mobile app or online and click to view recent charges. To select eligible transactions, they click "use points for purchases." Once Membership Rewards points are used, cardmembers receive a credit applied to their account within 48 hours. Money quote from Megan McKee, Vice President of Consumer Card Marketing, at American Express Canada:

"We're excited to be able to offer our cardmembers the ultimate flexibility when it comes to redeeming their points. By using their points toward eligible purchases, eligible cardmembers can use their Membership Rewards points simply and conveniently through their Amex App. Whether it's new furniture for the home, or back to school shopping or travel, cardmembers have more choice than ever before when it comes to redemption."

Amex Canada has placed a focus of late on frictionless loyalty; in addition to enabling UsePoints, the company has layered convenience onto its mobile user experience such as providing more options to pay with an American Express card using a mobile device, giving cardmembers first access to presales and exclusive offers through entertainment email alerts, and enabling in-app referral capabilities so cardmembers can refer friends to specific reward options.

The Amex Canada move follows another burgeoning trend: the increasing fungibility of reward points. Expect more major reward programmes to follow suite in the coming years by allowing members to redeem points for some portion or all of their in-kind purchases. The move points to a future in which consumers can move seamlessly between cash and promotional currency, leveraging one or the other when appropriate. That's real consumer convenience, and it will make reward programmes even stickier.

There is, however, a potential downside: that reward points themselves become increasingly commoditized and viewed by consumers as just another cash-back option - and as loyalty marketers know from experience, cash-back programmes often fail to change behavior as well as points-earning options that lead to a future redemption. programme operators will need to be careful to preserve a healthy measure of those future-redemption opportunities, which are critical in driving loyalty programme engagement. Balanced appropriately, however, pay-with-points offers will result in a more rewarding member experience.

-Rick Ferguson

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